(Bloomberg) -- The uncertainty swirling around Coinbase Global Inc. has made it too difficult to forecast how much revenue the company could earn, a Piper Sandler analyst said. 

The impending courtroom tussle with the Securities and Exchange Commission and continued lack of clarity around cryptocurrency regulation in the US, has “created too much uncertainty to prudently project revenues in future years,” according to analyst Patrick Moley.

Moley downgraded his recommendation on the largest crypto exchange in the US to neutral from overweight in a note dated Wednesday. He expects second quarter trading volumes and monthly transacting user totals to be the lowest in over two years.

Coinbase shares fell as much as 4.7% in New York on Wednesday. 

The broker is not the first to voice concern over the regulatory pressures weighing on Coinbase. Last week, Berenberg warned that the stock’s steep rally in June could be short lived after investors piled in following BlackRock Inc.’s application for a spot-Bitcoin exchange-traded fund, naming the crypto exchange as a custodian.

Since June 6 — when the SEC accused the company of illegally operating an unregistered securities exchange — shares in Coinbase have soared 55% through Monday’s close. The stock has more than doubled this year, according to data compiled by Bloomberg. Piper Sandler’s Moley attributes the rally to a combination of rising crypto prices and the flood of filings for spot-Bitcoin ETFs.

“Rising crypto prices have not translated to increased trading volumes for Coinbase in recent quarters and the timing of a spot Bitcoin ETF approval is anyone’s guess,” he wrote.

While Moley sees Coinbase as positioned to be a “major player” in the crypto space once regulatory clarity is achieved, he would “like to see more progress on the regulatory front and a convincing turnaround in the underlying fundamentals” before turning more positive. 

Piper Sandler held an overweight rating on Coinbase since May 2021, a month after the company went public. The stock had fallen 69% since the initiation as of the close on Monday.

Among the analysts tracked by Bloomberg, 11 recommend buying Coinbase stock while 13 rate it a hold and eight say sell. 

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